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Many people are under the misconception that Medicare and Medicaid supplement policies will cover the cost of long term care. While these plans provide benefits to help pay for hospital care and physician services, they provide very limited payment for cost of long term nursing home care.
Medicaid does assist with the cost of long term care, but it is a needs-based program. Relying on Medicaid to cover your care limits the care options that may be available to you. The purchase of long term care insurance gives you the flexibility to choose the type of care you need in the setting you desire. Recent changes in health care laws allows for even greater choice and care options.
What You Need to Know
When deciding whether to buy a long term care policy and what type of coverage to buy, you need to carefully review the policy’s terms. You should consider the following in this process:
How much coverage do I need? You must decide on a daily benefit amount; the amount of payment you need to help cover your cost of care. You must decide on the benefit period which can range from two years to lifetime coverage.
Does the policy cover nursing home, assisted living and care in your own home?
Most policies now cover all three, but some have reduced benefits for assisted living or home care. Recent changes in health care laws however, provide incentives for in home care.
What is the elimination period?
This is the period of time during which you will have to pay on your own before payments under the policy begin.
What triggers payment under the policy terms?
You become eligible to collect benefits under most policies when you have been diagnosed with a cognitive impairment or are unable to perform two (sometimes three) activities of daily living. It is also important to understand who will be responsible for making this decision.
Is there inflation protection?
The amount of coverage you need today may be inadequate 10 or 20 years from now. Most companies offer inflation riders for an additional premium. Make sure the insurance company is highly rated.
Where to Go For Help
Many of these questions are complicated, but they are important in understanding what you are buying. After you have reviewed long term care policies, you may want to have them reviewed by someone independent of the insurance company.
Many states have insurance commissions or insurance departments that have prepared comparative reviews of different policies available in their states. You can request these from their offices.
For a free consultation on the most appropriate estate plan for you and your family, please contact Michelle White at The Roberts Law Firm, P.C.
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